Financial aid budget grows 5.6% for FY14

The Corporation of Brown University has approved a total operating
budget of $902 million for the 2014 fiscal year, including the use of
$4.4 million from University reserves to balance revenue with
expenditures. Total undergraduate fees will rise 4 percent to $57,232. The budget for
undergraduate financial aid will rise 5.6 percent to $95.2 million.

PROVIDENCE, R.I. [Brown University] — Undergraduate financial aid will continue to be among the fastest growing elements in Brown University’s budget. For the 2014 fiscal year, the financial aid budget will grow by 5.6 percent to $95.2 million, outpacing a 4-percent increase in total undergraduate tuition and fees. The current budget for undergraduate financial aid has more than doubled in eight years.

In a business meeting by teleconference on Wednesday, Feb. 13, 2013, the Corporation of Brown University approved a consolidated operating budget of $902 million for the 2013-14 fiscal year, a 3.5-percent increase. Brown anticipates revenues of $897.6 million and will use $4.4 million of its reserves to balance the budget.

The Corporation’s February business meeting, scheduled for Saturday, Feb. 7, 2013, was canceled due to the weekend blizzard.

The approved budget also includes higher graduate student stipends, a small increase in budgeted faculty positions, investments in the School of Engineering, enhancements to improve campus safety, faculty and staff salary increase pools, and necessary investments in information technology.

“Despite national economic uncertainty and continuing resource constraints, the approved financial plan for fiscal 2014 provides a solid footing for all University programs and commitments, particularly undergraduate financial aid and support for graduate and medical students,” said Brown Provost Mark Schlissel. “The University continues on a path of steady growth, with targeted investments to sustain excellence in research and teaching and maintain our commitment to bringing the most talented students to campus, regardless of financial circumstances.”

The University provides an average need-based undergraduate scholarship of $33,585. Forty-three percent of undergraduates are receiving University need-based scholarships. Sixty-three percent of students who receive financial aid have no loans in their initial financial aid awards. Because the University’s financial aid budget will continue to increase at a faster rate than tuition, the 4-percent increase in student charges will net the University a 3.4-percent increase in tuition revenue. On average, the financial aid budget has grown 9.4 percent a year during the last decade (see Facts about financial aid site).

“The University has steadily improved its programs of student support for more than two decades,” said Elizabeth Huidekoper, executive vice president for finance and administration. “We recognize that college costs are significant, particularly for middle-class families. The decision to draw $4.4 million from University reserves was part of an effort to reduce pressure on tuition as a source of revenue.”

The budget

The University Resources Committee (URC), a 19-member body of faculty, administrators, staff, and students, develops annual budget recommendations for the president, who proposes the budget to the Corporation. Brown Provost Schlissel chairs the committee and makes the entire URC report and reports from previous years available online following the Corporation’s meeting.

Since creation of the Division of Biology and Medicine in the mid-1960s, the University has operated with three separate budgets that, taken together, make up the University’s consolidated budget:

Education and General, the largest of the three, includes support for all research, instruction, administration, and other academic and non-academic activities exclusive of biology and medicine. For fiscal 2014 “E&G” expenditures will increase 3.3 percent to $600.9 million.

Biology and Medicine supports research and instruction in the biological, medical, and health sciences, including the Alpert Medical School and what had been the Program in Public Health. For fiscal 2014 it will increase 4.2 percent to $121.2 million.

Auxiliary Operations includes the Brown Bookstore, University Dining Services, and other business operations that serve the University community. Auxiliaries are self-supporting and will provide $6.5 million to support central University costs from an operating budget of $132.2 million.

Beginning in fiscal 2014, the University will add a fourth budget to support the School of Public Health. At its meeting Wednesday, the Corporation established the school as a separate administrative and financial entity outside the Division of Biology and Medicine. (See School of Public Health news release.)

School of Public Health will begin its first year of operation July 1, 2013, with a budget of $47 million. The school will retain the revenues it had when it was part of the Division of Biology and Medicine, and the University will provide additional support to insulate both the School of Public Health and the Division of Biology and Medicine from the effects of structural changes to the budget.

Revenue

The URC’s report notes that sluggish and uncertain national and international economic conditions will constrain revenue growth in several important areas, including endowment income, federal research support, and fundraising.

Tuition and fees remains the University’s largest source of revenue, accounting for more than half of the Education and General budget. For fiscal 2014, total undergraduate charges will rise 4 percent to $57,232. That includes tuition (rising 4.2 percent to $44,608), room and board (rising 3.2 percent to $7,200 and $4,420 respectively), health fee ($690, an increase of $18), recreation fee ($64, unchanged), and student activities fee ($250, an increase of $36).

Endowment will provide $109.8 million to the revenue budget, an increase of $3.2 million (3.0 percent) from fiscal 2013. By rule, the Corporation keeps the yield from endowment between 4.5 and 5.5 percent of the 12-quarter average market value. For fiscal 2014, the endowment yield will be near the top of that limit, 5.47 percent.

Sponsored activities/Research is uncertain, given anticipated federal cuts. While Brown’s research enterprise — faculty and facilities — has grown stronger during the last decade, both federal granting agencies and grant recipients face possible reductions. The URC has projected a reduction in the Education and General budget of $1.6 million (6.4 percent) in indirect cost recovery (reimbursement for maintaining, operating and administering the research infrastructure) and a $3.8-million (6 percent) reduction in direct research sponsorship.

Fundraising is expected to grow modestly in the current economic climate. The Education and General budget anticipates a 2-percent growth in revenue from fundraising efforts, to $40.9 million.

Expenditures

The URC report observes that the quality of the University — and therefore its appeal to the strongest undergraduate and graduate students — is directly proportional to the quality of the people it employs.

Faculty and staff compensation accounts for 54 percent of expenditures in the Education and General budget. The budget includes funding for a 2.75-percent pool for faculty merit-based increases with an additional 1 percent for promotions, retentions and other adjustments.

To ensure the Brown remains a fair and competitive employer of choice, the budget includes a pool of 2.75 to 3 percent for performance-based raises for staff and 0.25 to 0.5 percent for equity adjustments.

Academic program support will include improvement in stipends and summer support and continued full health insurance for doctoral candidates. The School of Engineering will receive support for additional faculty and technical staff. Campus Life and Student Services will receive funding for establishing and staffing the new Office of Student Veterans and Commissioning Programs.

Facilities, infrastructure, and administration will receive support for operating and maintaining new campus space including the Building for Environmental Teaching and Research, CIT Data Center, and Barus and Holley. Public Safety will be able to enhance security efforts in the Jewelry District and on campus.

Other actions of the Corporation

School of Public Health

The Corporation approved creation of a School of Public Health in July. The new school will allow Brown’s already strong research and teaching in public health to expand further. The Corporation’s action follows unanimous faculty approval in November (see School of Public Health news release).

Acceptance of gifts

By University policy, all gifts of $1 million or more require formal acceptance by the Corporation. At its Saturday business meeting, the Corporation accepted or ratified previous acceptance of a number of gifts totaling more than $31 million. These include:

from Martin J. Granoff L.H.D. ’06 hon., P’93 a gift of $10 million to be designated in consultation with the president;

from the Irene Diamond Fund, a gift in the form of a limited partnership interest in real property currently valued at between $4 and $7 million, to support work in public health and aging in the School of Public Health;

from anonymous donors, a gift of $5.5 million for the Rooftop Greenhouse and Conservatory of the Building for Environmental Research and Teaching, and for the support of the Brown Annual Fund;

from an anonymous donor, an additional gift of $3 million designated for the renovation of the John Hay Library. The reading room is to be named at a later date in recognition of these gifts;

from The Kim and Ralph Rosenberg Family Foundation, Ralph Rosenberg ’86, P’17 and Kim Rosenberg P’17 as trustees, a gift in the amount of $2.5 million, of which $2 million is for an endowed assistant professorship in Brain Science and $500,000 is for the Brown Annual Fund;

from Mr. and Mrs. Shelby M.C. Davis, a grant of $2,127,970 for continued support of the Davis United World College Scholars Program at Brown University;

from anonymous Brown parents ’16 from the People’s Republic of China, a gift of $2 million of which $1.4 million is for the Greater China Fund Endowment; $500,000 of which is for an endowed scholarship for students from China; and $100,000 of which is for a current-use Brown Annual Fund scholarship for students from China;

from Rudy Kikel, a gift of $1,005,786 to purchase, preserve, or improve access to materials such as books, journals, and electronic resources in the field of gay and lesbian literature, to award prizes in creative writing with preference given to works of interest to the gay and lesbian community, and to support undergraduate teaching and research awards;

from Gary Ginsberg ’84 and Susanna Aaron, a gift of $1 million, of which $750,000 is a gift in kind of artwork for the David Winton Bell Gallery, $150,000 will establish the Irwin E. Ginsberg P’84 Aging Research Fund, $50,000 for the School of Engineering’s Entrepreneurship Program, and $50,000 for the Brown Annual Fund.

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